Last year I had some financial difficulties and I couldn't pay off my debt. The uncertainty of my financial future was adding to my already stressful life. After months of worry, I finally decided to contact a bankruptcy attorney. After discussing my options with the attorney, I decided to file bankruptcy. My name is Kyle Diggler and if you're struggling with debt and considering bankruptcy, I'm here to help you. I'm not an expert, but I want to share my story and my experience of filing bankruptcy with others who are in a similar situation. As you read my blog, you'll learn all about the bankruptcy process so that you'll know what to expect. I'll also share some tips to help you start your life over financially. I hope that my blog answers all the questions you have about filing bankruptcy.
There are several advantages to Chapter 13 bankruptcy, including the ability to save secured assets and t
When you are dealing with a lot of debt, it can be hard to know where to turn. Filing for bankruptcy seem
Chapter 7 bankruptcy is something that many people consider. It can be a way to help you with your past d
Are you having problems with your finances? If so, is it because you have too much debt? When people have
Sometimes parents hesitate to file chapter 7 bankruptcy because they're afraid the court will take their
Sometimes parents hesitate to file chapter 7 bankruptcy because they're afraid the court will take their children's savings. Generally, money owned by kids won't be touched by the trustee, but whether that will be true in your case depends on a few factors. Here are two questions that can help you determine if your kids' cash is at risk.
How Were the Accounts Set Up?
Accounts set up using the Uniform Gifts to Minors Act (UGMA) or the Uniform Transfers to Minors Act (UTMA) are automatically exempt from being snagged by the bankruptcy trustee. These financial products are considered trusts, and any assets you put in them—money, property, stocks—belongs to the person whose name is on the account, even though you are the custodial agent for it.
The only time a trustee would dip into these types of accounts is if they thought you were using them to hide assets. The trustee will look at the last 1–2 years of account activity, paying particular attention to the months leading up to when you filed bankruptcy. If there are deposits they deem suspicious, the trustee may sue to recover the funds if you can't adequately explain them.
For instance, you consistently put $100 a month in the account but, one day, you deposit a $5,000 check your parents gifted to your kids. The trustee will flag that transaction, and you'll need to provide proof those funds didn't come from you or you'll be forced to transfer the cash to the court.
Have an attorney review the bank statements for your kids' saving accounts before you file bankruptcy. The lawyer can let you know if there's something that will catch the trustee's eye and help you put together the proof you need to protect those funds.
Can You Prove the Money Belongs to Them?
Unfortunately, regular accounts may not be as protected as those created using UGMA or UTMA, even if they have your kids' names as co-owners. Because you are the primary signer on the accounts and an adult, the bankruptcy court may treat the savings as though it were just another asset you own.
If you've used up your bankruptcy exemptions covering other assets, you may still be able to keep the trustee from taking your kids' money by proving it belongs to them. This can be challenging because the trustee will want to see documentation, such as canceled checks, that you may not have.
Consult with a chapter 7 bankruptcy law firm as soon as you can. A bankruptcy lawyer may know of alternative ways to shield the money from being included in your bankruptcy estate.
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